Just a Note

It's another busy day, and blogging will remain very light for a while (especially as I am currently recovering from the flu) but I thought that I would put this link to Carlo Cipolla's Basic Laws of Human Stupidity up here. The laws are insightful, enjoyable, and seriously helpful as a guide to life, I think. I quote;
Whether one considers classical, or medieval, or modern or contemporary times one is impressed by the fact that any country moving uphill has its unavoidable σ fraction of stupid people. However the country moving uphill also has an unusually high fraction of intelligent people who manage to keep the σ fraction at bay and at the same time produce enough gains for themselves and the other members of the community to make progress a certainty.

In a country which is moving downhill, the fraction of stupid people is still equal to σ; however in the remaining population one notices among those in power an alarming proliferation of the bandits with overtones of stupidity (sub-area B1 of quadrant B in figure 3) and among those not in power an equally alarming growth in the number of helpless individuals (area H in basic graph, fig.1). Such change in the composition of the non-stupid population inevitably strengthens the destructive power of the σ fraction and makes decline a certainty. And the country goes to Hell.


Toni said…
Sorry to hear you are unwell. I have never read Cipolla, but would ask how you think it relates to Ireland. Despite many British stereotypes, Ireland has for years had one of the highest academic standards in Europe and yet the country is definitely going to hell. The current betting in the markets is a default or IMF assistance within the next two weeks. I would say earlier because when trading opens on Monday the bond yields should be significantly higher. I would be interested in your opinion as to what went wrong in Ireland. Was it just too much too soon? I vaguely remember Ireland from when I was a child, (many Glaswegians have a strong association with Ireland), and it certainly was nothing like when I passed through Dublin about five years ago.
Martin Meenagh said…
Hi Toni

Actually, I was being overcautious. I was ill on Thursday, bad yesterday, and had a bad night, but a half tonne of orange juice and a good breakfast seem to have sorted me out, or at least put me on the mend.

Ireland's screwed, to be blunt. It breaks my heart to see it, but being a frequent visitor (I've blogged a good bit from there) and having seen 'eurocity' rise and fall it was sadly predictable. A friend on facebook reminded me of Brad Pitt's words to Harrison Ford-'This is an Irish story, not an American one, so don't be looking for a happy ending'.

I think Morgan Kelly summed things up well in the Irish Times the other day; the republic is waiting for the mortgage defaults that are coming. The economy is on death row, and austerity as practised has turned a not crazy idea of setting up a toxic bank into a sort of insurance payout for various German banks.

One other interesting thing to me--not speaking as a citizen of Ireland, which I am, as well as British subject--is that Germany seems not to miss a chance to destabilise the euro when not held to Sarkozy's massive rescue package. It is a serious mistake to underestimate Angela Merkel, if you look at her career, and an equally serious one to assume that her wishes don't reveal themselves in unexpected ways. Has she concluded that Germany is stuck in the euro as it stands until the situation changes--and is she losing no chances to change the situation?
Martin Meenagh said…
Sorry, the link to the Irish times only works in full screen.
Toni said…
You are quite correct about Merkel, In fact the Germans as a whole are reluctant members of the Euro. It was German insistence that Eurocurrency has an identifier to its origin. After enduring the hyper inflation of the in-between years, the Bundesbank was a byword for caution and stability, to suddenly find their monetary policy linked to the, frankly, laughable Italians must have been a shocker. How they view the former soviet states and the possibility of the Turks can only be imagined.

The Irish situation is, from a traders point of view bizarre. There is no doubt that the economy is screwed but whereas a default by the former celtic tiger should cause the Euro to drop like a stone, there are already rumblings that it will be viewed as a positive by the market. This defies all logic as if Ireland is bailed out or supported in any meaningful way, then why should Greece Portugal or Spain take their commitments seriously?

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